To explain the simple theory of income determination, Keynes used
Consumption and Investment
Aggregate demand and aggregate supply
Production and Expenditure
All the above
The Marginal Propensity to Consume
ΔS/ΔY
C/y . ΔP/ΔQ
ΔP/ΔQ
ΔC/ΔY
Keynes assumed the situation of
Full employment
Under employment
Involuntary unemployment
Marginal unemployment
Aggregate demand is the total demand for all goods and services in an economy from
All sectors including the rest of the world
The household sector
The household and government sectors
What is the marginal propensity to consume?
The ratio of the change in consumption expenditure to the change in disposable income
The percentage of income that is consumed
The percentage of income that is not saved
One minus the fraction of total disposable income that is saved
As the MPS increases, the multiplier will:
Decrease
Increase
Either increase or decrease depending on the size of the change in investment
Remain constant
The fraction of a change in income that is consumed or spent is called:
The marginal propensity of expenditure
The average propensity to consume
The marginal propensity to save
The marginal propensity to consume
In the equation C = a + bY, which describes the aggregate consumption function, 'b' stands for?
The amount of income when consumption is zero
The amount of consumption when income is zero
The average consumption level
The aggregate demand curve is downward sloping because
A lower price level, holding the nominal quantity of money constant, leads to a larger quantity of money in real terms causes the interest rate to fall, and stimulates planned investment spending
A lower price level, holding the nominal quantity of money constant leads t a larger quantity of money in real terms, causes the interest rate to fall, and stimulates planned investment spending
A higher price level, holding the nominal quantity of money constant
A higher price level holding the nominal quantity of money change
The aggregate demand curve
The total quantity of an economy's intermediate goods demanded at all price levels
The total quantity of an economy's intermediate goods demand at a particular Price level
The total quantity of an economy's final goods and services demanded at a particular level.
The total quantity of an economy's final goods and services demanded at different price levels
